After years entangled in red tape, Jackson Gulch Reservoir passed the first major hurdle to installing a second hydropowered generator in its canals and is working on a plan to move forward.

In August, the Department of the Interior reversed a decision that had prevented the Mancos Water Conservancy District from collecting the revenue from generators, said Gary Kennedy, the district's superintendent.

Hydropowered generators are becoming a common long-term strategy for irrigation systems to help maintain current rates for water users. But before the decision in August, the district couldn't keep the revenue from new generators, and there was no reason to install them, Kennedy said.

The district pursued federal legislation to install the first generator below the Jackson Gulch Dam in 1994, he said. But the Bureau of Reclamation said the legislation limited construction to a single generator until recently.

The district's current hydropower generator produces 260 kilowatts per hour - enough for 40 to 60 homes a day. It also cut down on the maintenance to the area below the dam by 70 percent. The generator cost $160,000, and the district will pay it off in about 20 years.

The most likely place for a new generator is a 240-foot drop shoot about two miles from the lake. It will also reduce the erosion on the concrete in addition to producing power for more than 60 homes.

"It will have a positive effect for the taxpayers as well as the water users," Kennedy said.

The next step is to submit a plan to the Bureau of Reclamation, said Dan Crabtree, a water-management group chief for the bureau. The project will then be reviewed for environmental impact, and any affect on structures in the area. The district is working on the plan for the new generator.

"We definitely support the development of clean renewable energy," he said.

A similar project was started at the Dallas Creek Project in 2010, and the last generator will begin running in the spring, Crabtree said. However, this project was not held back by the Water Conservation and Utilization Act, like the Mancos Project. This act was the one that required all revenues to be given to the Bureau of Reclamation.

The district had also been pursuing federal legislation that would have solved the revenue problem, and Kennedy went before Congress to testify for it. The bill would still help shorten the environmental reporting process for the Mancos district and similar projects across the country.